Road to recovery

Features - International Recycling News

The Recycling Today Media Group brought its Paper Recycling Conference model to New Delhi in late January 2015 in the form of the first Paper Recycling Conference India.

The Taj Palace Hotel in New Delhi served as the venue for the conference, which brought together more than 200 delegates from the Indian subcontinent and other parts of the world Jan. 29-30.

Recycling Today and its media allies, Waste Recycling India, Mumbai, and Dubai, United Arab Emirates-based Waste & Recycling Middle East, organized the event. Several Indian papermaking and recycling associations also supported the conference.

The sessions at the two-day event sparked lively debates in the question-and-answer periods that followed, and the conversations continued at networking breaks that brought together brokers, processors and consumers of recovered paper.

The sessions also provided vital details on the status of the growing Indian paper industry and a recycling sector that is rife with additional growth opportunities.

Current deficit

As its paper industry continues to grow, India has come to rely on more than 2 million tons of imported recovered fiber to help meet its feedstock needs. But, with its domestic recovery rate estimated at from 25 to 33 percent, the country’s paper industry also is exploring how to recover more scrap paper closer to home.

Panelists at the conference’s keynote session offered varying opinions as to how India will find mill feedstock either within the nation or from overseas suppliers.

Jogarao Bhamidipati, who helps coordinate domestic scrap paper collection efforts for Indian paper manufacturer ITC Ltd., said India’s paper recovery rate may be as low as 25 percent. “What we actually throw away is what we need as an industry—nearly 8 million tons per year [of potential feedstock],” Bhamidipati said.

ITC operates a collection effort known as WOW (Wealth out of Waste) to encourage Indians to recycle paper beyond the commonly collected old corrugated containers (OCC) and old newspapers (ONP) grades. But, Bhamidipati said, “Things are not going the way we wanted. It’s a matter of discipline and the habits of people.”

Kolkata-based Emami Paper Mills Ltd. Executive Director P.S. Patwari said “the paper industry in our country is short of raw material. The future lies in recycling.”

An Indian government projection that its paper industry’s furnish needs will grow from 13 million to 14 million tons in 2015 to 25 million to 30 million tons in 2025 should be a wake-up call, Patwari said.

Patwari said even accepting a higher current domestic scrap paper recovery figure of 33 percent in India, that rate would still leave Indian mills from 7.5 million to 10 million tons shy of material in 2025.

Rahul Khanna, director of Khanna Paper Mills Ltd., Amritsar, India, offered encouragement that India would rise to the occasion regarding recycling. “We are going to recycle not out of choice—it is a necessity. We don’t have any other options, [but] necessity is the mother of invention.”

Consultant Arun Bijur of Chennai, India-based SPB Projects and Consultancy said he also was convinced “that recycling will be something that develops with much greater force in the years to come.”

Bijur, who has 45 years of experience in India’s paper industry, said the Indian government will need to play a role to introduce “a much better way to handle garbage” and recyclables in India.

Driving India's metal markets

More vehicles are on India’s roads each year, and more of them are produced domestically, giving optimism to the Indian nonferrous metals sector, according to presenters at the 2015 Metal Recycling Association of India (MRAI) International Conference in Mumbai in February.

Mohan Agarwal of Haryana, India-based Century Metal Recycling Pvt. Ltd. told attendees India has risen to become the seventh largest automaker globally and the second largest producer of two-wheeled vehicles (motor scooters and motorcycles).

With the motor vehicle industry as a major customer, Century Metal Recycling has grown in its nine years to operate seven secondary aluminum and zinc alloys plants in India with 225,000 metric tons of total annual capacity.

Globally and in India, Agarwal said aluminum “plays an increasingly significant role” in vehicles as manufacturers seek fuel efficiency and lower carbon emissions.

The four-wheeled, two-wheeled and three-wheeled (auto rickshaw) vehicles pouring onto Indian roads also require batteries, which has been good news for Jaipur, India-based Gravita India Ltd. Navin Sharma of the lead-acid battery and lead alloys production firm said India now is one of the top five nations in annual lead demand.

India is currently a net importer of lead, bringing in 200,000 metric tons annually, “including some scrap,” Sharma said.

India also is experiencing growth in nickel-bearing stainless steel production, said Anil Shah of Ni-Met Metals Inc. Oakville, Ontario-based Ni-Met is among the companies shipping stainless steel scrap to India, Shah said, with stainless 304 and 316 series bales and turnings being grades commonly shipped.

Shah said India’s stainless steel production was anticipated to grow from 1.9 million metric tons in 2004 to 4.57 million by 2020. India’s stainless mills use 53 percent scrap as feedstock compared with 76 percent in the U.S., he added.

More coverage of the 2015 MRAI Conference can be found at www.RecyclingToday.com by searching the term “MRAI.”

Leading destination

North America’s view of India was the topic of a session that featured two of the largest recovered fiber exporters in the U.S.

Throughout the 21st century, China has established and consolidated its position as the leading destination for scrap paper exported from the United States.

But, the two U.S.-based exporters told attendees that India’s share of that fiber likely will grow in the next several years.

Session moderator Bill Moore of Moore & Associates, Atlanta, said annual paper and board production in the U.S. has declined since 2007, though recovery has increased. The booming paper producers in China have absorbed much of that recovered fiber in the past 12 years.

Peter Wang of America Chung Nam (ACN), City of Industry, California, said Chinese mills purchased 75 percent, or 11.5 million out of 15.3 million tons, of the scrap paper exported by the U.S. in 2014.

While China remains far and away No. 1 in volume, “India does play a strong role in the export market in the U.S.,” Wang said. He noted that while China brings in 68 percent of its U.S. fiber from the Pacific Coast, India helps keep Atlantic Coast exporters busy by procuring 99 percent of its U.S. supply from the East Coast.

The trend toward India having greater influence on the East Coast is growing, Wang said, noting that from 2012 to 2014 “China has reduced its [purchases] by 284,000 tons, while India is up by 262,000 tons in that same period.” Wang added, “India pretty much picked up anything China stopped buying.”

Ashu Vyas of Cellmark Recycling, San Rafael, California, also said recovered fiber exports to India are increasing “and we expect this trend to continue for some time.”

Vyas said a perceived blurring of specifications and grades in categories such as ONP and OCC concerns Indian buyers.

However, India’s paper mill sector relies on “customized” grades rather than “commoditized” grades, he added. Concerning this preference, he said, “This desire will influence the availability of U.S. supply.”

More Paper Recycling Conference India coverage is available at www.RecyclingToday.com by searching “PRC India.”

Taking stock of stock lots

The city of Bhivandi, India, adjacent to Mumbai, hosts an enclave of entrepreneurs dedicated to converting unfinished and rejected rolls and unused sheets of paper into new products for the Indian market.

Hrishikesh Vora of Mumbai-based Victory Creations, says the several dozen companies housed in a series of contiguous warehouses in Bhivandi are dedicated to this paper (and increasingly plastics) importing and conversion process, known collectively as the stock lots sector.

In the district, which was bustling with activity on a Monday morning in February 2015, some companies are engaged primarily in warehousing purchased stock lots. Others deploy converting machinery.

The enterprising Indian stock lots sector even finds uses for misprinted labels or packaging rejected by overseas consumer companies. Victory Creations can convert such misprinted items into paper plates.

Vora says the district formed within Bhivandi largely for tax reasons, as importers can avoid a hefty warehousing surcharge that exists in adjacent Mumbai.

Pricing in this market can depend on many factors, Vora says, including the grade and thickness of the paper or board, the weight and size of material left on a roll and the extent of the damage on some rolls.

Features - Auto Shredding Focus

For many years, when a scrap processing company bought a shredder system, it would receive basic installation drawings and the necessary loads of the equipment to build the appropriate foundations and support structures. However, more recently, several automobile shredder manufacturers have increased the scope of their product offerings as well as the range of their services to provide much more than equipment. By using the services of a company that provides full-service system integration, recycling operations may be able to save time as well as money.

Beyond shredder selection

A scrap processor without shredding experience needs to consider many aspects prior to an auto shredder installation. Missing just one of these concerns can have expensive consequences for an operation. Experienced project management from the earliest stages of planning is the key to a successful project that is on time and within budget.

Twenty-two years ago when I first became involved with shredders, few if any companies wanted to take on turnkey projects. Some shredder providers, when asked about turnkey installations, will say they are equipment manufacturers, not construction companies. Yet, who knows how to assemble a shredder plant better than the company who supplied it?

Today, many scrap processors are recognizing the value that an experienced system integrator can bring to an auto shredder installation. Areas where experience can play a major role in ensuring a successful installation include:

Permitting – Potential shredding operations need to consider the current permitting requirements at their sites as well as any future requirements that could be expected. Environmental controls for water and air emissions are continuing to increase. Planning for the future can save thousands of dollars in retrofits. For example, adjusting site general arrangements and equipment locations now, at minimal cost, may allow future upgrades/additions of environmental control equipment without costly relocations. A system integrator should have the experience and resources to plan for those needs.

Engineering – Many aspects of a shredder’s installation require professional engineers. Examples of these aspects are the foundations and pier locations for numerous conveyors, motors, shredder and separation equipment; hydraulic and electrical installation; the design of stairs, platforms and bunkers; the design of system electrical utilities, including HVAC, lighting, power and telecommunication pathways; and construction administration, including review of all inspection and test reports.

Our experience also has taught us that designing and building a motor house can lead to cost overruns on a project. Many contractors and engineers who are unfamiliar with a shredder system may spend many hours trying to custom design new solutions instead of using a time-tested and refined design that is far more durable and easier to maintain. New containerized electrical and hydraulic rooms also can reduce the size of these buildings. For instance, my company, U.S. Shredder, based in Miramar Beach, Florida, has proven and successful designs that we share with our customers as a value-added service.

Civil and concrete construction – Although this is one area that can be handled through local contractors, some system integrators have experienced installation teams on staff that can handle the ground preparation and the concrete for a project. The advantage of having a system integrator do all of this work is that during this stage, other projects, such as staging and preparing the conveyors and other shredder system components for installation, can occur simultaneously.

Mechanical installation – This is an area where we find systems integrators can realize tremendous savings for their customers in the installation process. The system integrator’s crews are familiar with the company’s equipment. I’ve been on many installation sites where the mechanical installer spends hours on the phone with the factory that manufactured the equipment to be installed, asking questions about the correct procedure for the installation of a piece of equipment. Since installation space is tightly constrained, having the correct sequence for the installation and coordination between crafts is critical to maximizing concurrent and parallel installation efforts, so one craft is not delayed by another. Our crew, for instance, has completed many installations of our equipment while integrating with local craft labor for electrical, piping and structural steel, resulting in faster and more efficient installation. The amount of time that rental equipment, such as cranes, is needed is reduced, as well, further adding to the savings.

Site layout and traffic flow – Scrap processors who have never operated a shredder system before often learn lessons after they are up and running that make equipment and customer traffic flow more efficient. System integrators can use their experience with previous successful shredder installations to assist customers with proven ideas on scale locations, unloading, locating unprepared and shredded material and rules and regulations to keep employees and customers safe while in the area.

Peripheral equipment, building and piping advances – Over the years, system integrators have learned numerous techniques when placing buildings and other required structures and systems that save time and money during the installation phase. As previously mentioned, prewired and prepiped hydraulic containers save tremendous time and lessen the size of the motor house. Electrical containers holding the motor control center, PLCs (programmable logic controllers) and even operators stations are another option that yields savings. New hydraulic “flex” piping, although it costs more initially, saves installation time and greatly reduces the amount of welding needed, thus reducing the time needed to flush the hydraulic system before startup.

Nonferrous recovery systems – The equipment available to extract the maximum amount of nonferrous metals from the ASR (auto shredder residue) stream is more sophisticated than ever. The effectiveness of state-of-the-art sensors for the recovery of stainless steel, copper wire and other nonferrous metals greatly depends on how the material is presented for processing. Air aspiration and air density tables have been added to systems where once only trommel and screen separation were used. The integration of these systems requires an experienced team that knows how to link all of these technologies for maximum separation.

Expanded capabilities

These are just a few of the many factors scrap recycling operations must consider before installing new shredders or downstream systems.

The experience and expertise of system integrators often means they can work with the customer to offer a detailed plan for the shredder installation and the site and often can give a “not to exceed” quotation. This takes the guesswork out of a recycling company’s budget and financing for such a project.

Just as shredders and downstream equipment have advanced over the years, so have the capabilities of many of the companies that supply them. On system upgrades and retrofits, for instance, system integrators like U.S. Shredder often will use a three-dimensional scanning device to scan the existing equipment and create a CAD (computer-aided design) drawing for exact measurements and dimensions. This new application is extremely helpful for older systems that may not have accurate engineering drawings on file.

The next time a recycling operation plans a system upgrade or a greenfield site, they should consider contacting the system integrators in our industry to see if a turnkey installation is the right approach.

An eager host

Features - Conferences & Events

When the Bureau of International Recycling (BIR) last convened in Dubai, United Arab Emirates, in May 2009, recyclers and secondary commodities traders were coping with a market that was trying to get back on its feet after the financial crisis, plummeting commodity prices and renegotiated and cancelled transactions of late 2008.

As the BIR prepares to reconvene in Dubai in May 2015, the commodities market has again hit a rough patch, with ferrous prices in particular in the midst of a trough in early 2015.

The Brussels-based BIR says it will provide insight into the current market turmoil when it gathers in Dubai at the InterContinental Festival City hotel May 17-20. It also will provide some welcome distractions in the form of receptions and sightseeing opportunities that display the prosperous emirate of Dubai.

Change in plans

The BIR 2015 World Recycling Convention was initially scheduled to take place in Bangkok. Political turmoil in that nation, however, caused the international recycling organization to change its plans and seek a new venue.

Dubai, with its bounteous hotel and hospitality infrastructure as well as a willing and eager regional partner in the form of the Dubai-based Bureau of Middle East Recycling (BMR), stepped in to welcome the convention on short notice.

Out and about in Dubai

As one of the people planning the Bureau of International Recycling (BIR) 2015 World Recycling Convention & Exhibition in Dubai, United Arab Emirates, BIR Communications Director Elisabeth Christ says she is looking forward to letting the emirate be one of the star attractions at the event.

During the May 17-20 time frame of the event, Christ says, “BIR offers some really interesting sightseeing tours that convey a true picture of the beauty and the culture of Dubai,” which is one of the seven United Arab Emirates.

Among other options available to BIR delegates and their guests, Christ says, “The Dubai city tour provides an excellent overview of what the city has to offer and the visit of Burj Khalifa and the Dubai Mall is a once-in-a-lifetime experience in the world’s tallest building and biggest mall.”

Additionally, a “cultural awareness tour gives a unique insight into some of the aspects of daily life in the Emirates, and the desert trip is an unforgettable excursion into the stunning beauty of the desert with an exceptional al fresco dining experience.”

On Monday, May 18, BIR delegates can be part of the country club scene at the “An Arabian Night” welcome reception at the Al Badia Golf Club in Dubai. The reception “will take place in the gardens and on the terraces” of the club, BIR says. Robert Trent Jones II designed the course at Al Badia, and BIR says the club “offers an outstanding setting, breathtaking views and superb service.”

Although Dubai and Bangkok are more than 3,000 miles apart, they both reside within the continent of Asia. The BIR says it plans to focus much of its programming on Asia, the world’s most populous continent, which also is home to some of the fastest-growing economies.

“The BIR convention in Dubai will provide unique insight into the recycling market in the Middle East, with of course privileged access to market information also from India and China,” says Elisabeth Christ, BIR communications director.

She continues, “As for speakers, and of course apart from the presentations made by the different board members, most of our commodity divisions and committees will invite industry experts from the Middle East, India and China, who will give a ‘local flavor’ to the meetings.”

Among the BIR divisions, committees and councils that will convene in Dubai during the convention are the Ferrous, Non-ferrous, Paper and Textiles divisions; the Shredder, Stainless Steel & Special Alloys, E-Scrap, Plastics and Tyres & Rubber committees; and the International Environment and International Trade councils.

In the expectation that the event will attract delegates from the Middle East region and from Asia’s two largest nations, the BIR will offer extra translation services in addition to its customary simultaneous translation into several European languages. “With simultaneous translation in Chinese and Arabic, we will be providing the possibility to many local and regional businesspeople to come and share their knowledge with BIR delegates without language restraint,” Christ says.

Recyclers and traders naturally will gravitate to the division meetings for the materials they specialize in “to learn important market data and developments,” Christ says. Many attendees also benefit by broadening their horizons at additional meetings, she comments.

Christ recommends the International Environment Council and the International Trade Council meetings, where delegates can “get updates on important trade and legislative developments.”

For those individuals seeking data, Christ says the BIR “will also publish a number of new statistics, mainly on ferrous and nonferrous” metals recycling, which will be made available at the Dubai World Recycling Convention.

Time to talk

The majority of World Recycling Convention delegates attend not only to hear from speakers and presenters but also to meet up with current trading partners and to cultivate new ones.

Christ says long-time BIR members are well-aware of the convention’s role as a meeting place, but she reassures prospective new attendees that they will be making the right choice if they decide to head to Dubai in May.

“For anybody who has not been to a BIR convention before, the most important thing to know is that he or she will meet, in two or three days, all key players and key contacts from the most important recycling companies involved in international business,” she says. The BIR World Recycling Convention provides “in one spot the business for which a person would normally need to travel the world,” Christ adds.

Those conversations may occur before and after division, committee and council meetings in an impromptu fashion or at several events the BIR has planned.

Among the numerous networking breaks and receptions (some by invitation only, it should be noted) that the BIR has scheduled during the 2015 World Recycling Convention are:

a reception for members of the press Sunday evening, May 17, and a dinner for BIR Advisory Council members;

an exhibition and hospitality area open throughout the day both Monday, May 18, and Tuesday, May 19;

breakfast meetings of the Ferrous Division board and the Shredder Committee board on Monday morning;

a Monday luncheon sponsored by the Ferrous Division and the Stainless Steel & Special Alloys Committee;

the “An Arabian Night” reception Monday evening (See the sidebar, “Out and About in Dubai,” on this page.);

breakfast meetings for members of the Non-Ferrous Division board and the Latin American Committee Tuesday;

a Tuesday luncheon sponsored by the group’s Non-ferrous Division and the E-Scrap Committee;

a “Meet the Exhibitors” gathering Tuesday evening;

a Young Traders Networking evening event Tuesday for delegates 35 years of age and younger;

a National Association Directors dinner Tuesday evening;

a breakfast meeting for members of the Paper Division board Wednesday, May 20; and

Among the governance matters BIR will attend to in Dubai is the election of the organization’s new president and treasurer, “who will be leading the organization for two years, renewable for another two years,” Christ says.

Hot property

The venue for the 2015 Bureau of International Recycling (BIR) World Recycling Convention & Exhibition is the InterContinental Festival City property, which will host recyclers and traders from throughout the world May 17-20

The InterContinental Hotels Group (IHG) at www.ihg.com touts the property as “a luxurious five-star hotel with around 500 guest rooms and suites. Inspired by a graceful sailboat, the hotel stands tall on Dubai Creek and is ideally located for business close to Burj Khalifa and the Dubai World Trade Centre.”

Amenities at the InterContinental Festival City include the Michelin-starred restaurant Reflets par Pierre Gagnaire, a full-service spa and a 25-meter (82-foot) outdoor pool.

Delegates devoted to their fitness routines will have access to a 24-hour gymnasium “complete with a free weights, a kinesis wall, steam and sauna rooms, [the] outdoor swimming pool and three spa pools located on the leisure deck with uninterrupted creek and city skyline views.”

If adding calories is a higher priority than burning them off, InterContinental Festival City features several options. In addition to the Reflets par Pierre Gagnaire French restaurant, the Terra Firma Steakhouse is on hand for red meat eaters; additional French cuisine is available at Choix Patisserie and Restaurant; and Anise offers a variety of cuisines prepared at live cooking stations.

In the evening hours, the “Vista Lounge offers excellent harbor views and relaxed cocktails while Eclipse Champagne bar offers sky-high views in an intimate and sophisticated setting,” according to IHG.

Since the technology’s introduction in the 1980s, tailored metal blanks have saved automakers millions of tons of steel. By combining thick and thin steel sheets that get stamped into shape in automotive press shops, they support complex structural parts in most cars and trucks.

Tailoring blanks allows companies to make door panels that are stronger and thicker where they have to absorb crash damage but thinner everywhere else, reducing metal use and lowering vehicle weights. But it’s a steel-born technology, and tailoring blanks is much harder to do in other metals—a problem as automotive companies transition many parts from steel to aluminum.

Blank producer Shiloh Industries thinks it has a solution—laser-welded aluminum blanks that act much like their steel counterparts in stamping presses.

“We’re developing these things now—not because we’re getting requests for it. This is our thinking on where the industry is going,” says Bernhard Hoffmann, executive director, application engineering, for the Valley City, Ohio, company. “Our customers, as they go to aluminum, they’re going to need this.”

Less metal equals less weight

Automakers use laser-welded steel blanks to place small amounts of heavy, high-strength steel in the middle of body structures, surrounding that metal with thin gauges of less expensive material. Hoffmann estimates that an inner door panel, the portion of the door assembly that adds structure and crash protection, weighs about 21 pounds when made from a single-width sheet of steel. Laser-welded steel blanks cut that to about 17 pounds, a 20 percent savings per door, per car.

Simply switching from steel to aluminum generates huge weight savings. With aluminum, inner door panels made from single-width sheets of metal add about 9 pounds to the vehicle, nearly half that of a steel laser-welded blank. However, aluminum is about three times as expensive as steel, so that lower weight comes at a higher cost.

Shiloh Industries has produced test doors using its laser-welding technology on aluminum panels, bringing weights down to 7.6 pounds per door inner, a 16.2 percent drop from the uniform-width aluminum part. Hoffmann explains, “Because aluminum is that much more expensive, it makes this technology that much more valuable.”

Also, not all of the metal in the final door panel makes it onto the car. Some gets cut from the sheets during the blanking, stamping and forming phases. Switching from single-width stampings to laser-welded blanks reduces total material used from 17 pounds of aluminum to about 15 pounds, a 17.7 percent drop. That 8 pound material cut per four-door vehicle can add up when producing more than 100,000 cars or trucks.

As automakers balance their weight-saving needs with materials costs, technologies that minimize aluminum use are going to be very welcome, which is not necessarily good news for aluminum scrap dealers. Hoffmann adds, “If you take a look at the cost-per-pound savings, (laser welding is) going to be a more viable option than going to monolithic stampings.”

Precision welding aluminum

The problem with creating highly tailored aluminum blanks is that the metal isn’t as friendly to processing as steel. In both welding and stamping, the finicky aluminum requires new manufacturing processes.

“The main difference between working with steel and aluminum: When you weld steel, it gets martensitic; it becomes very strong,” Hoffmann explains. “When you weld aluminum, you change the grain size, and it becomes a lot softer.”

For Shiloh, the challenge was twofold: welding aluminum sheets together and creating welds strong enough to handle the stamping process. Hoffman says both problems required research, engineering and a decent amount of trial and error.

Initially, applying laser-welding technology used for steel panels looked like it would be easy. Engineers joined several panels, giving them hope that Shiloh could use existing equipment and processes in new materials. But the welds in those multithickness aluminum sheets split in the stamping presses.

Alternative joining techniques

Automotive customers need consistent, predictable results from parts, so Shiloh’s engineers considered alternative joining methods. One of the first considered was friction-stir welding.

In friction-stir welding, a spinning tool rolls across the surface of the metal sheets, creating friction that softens but doesn’t quite melt the panels, bringing the metal into a plastic state. Hoffmann says the technology joined the aluminum panels quite nicely, but, he adds, the results weren’t consistent.

“When you try to form it and bend it in multiple directions, we saw a lot of issues,” Hoffmann says. “It made a good part, and then two days later, it would make a crack.”

Intermittent cracks weren’t acceptable either, so that sent Shiloh back to lasers, where Hoffman’s team eventually found the right combination of processes to control the welding. The key was understanding aluminum’s metallurgical properties and using them to create reliable work processes, Hoffman says.

“You need very tight control of the grain growth and heat-affected zones in that area, so you don’t get discontinuities,” Hoffman says. “A lot of the expertise came from the casting side, understanding how aluminum melts and how to control that.”

Blank producers test their products by subjecting them to bend-and-stretch torture tests, simulating the industrial environments of automotive stamping presses. The parts get tested until they fail. A successful test piece breaks where the metal is thinnest, where logically, the parts should be weakest. Failure is when the test piece breaks at the weld joint.

“We’ve run thousands of parts and thousands of test samples and never had a failure inside the weld,” Hoffman says. “We think we have this process down to a tee,” he adds.

Simplified manufacturing

Laser-welded aluminum blanks can reduce the complexity of automotive part making. With steel, tailoring blanks has allowed companies to replace two- and three-part assemblies with one complex piece. With aluminum, some designers have been moving backward, replacing single-piece structures with multipiece assemblies that have to be joined after stamping. Aluminum’s low mass provides weight savings, but material costs and cycle times are higher.

“When people first started asking for aluminum parts, they thought we’d have to do a two-piece assembly,” Hoffmann states. “Using these laser-welded blanks takes another step out of the assembly for the OEMs and Tier 1 suppliers.”

With the industry moving to new materials, Hoffman adds that companies are going to be looking for the technologies that support the precision and speed they’ve achieved in steel. Producers are already moving to more expensive materials. If build times grow as well, lightweighting manufacturing costs could eclipse benefits.

“We make blanks, and we stamp parts, so we’re really aware of both sides,” Hoffman explains. “We’re very conscious of the cycle times and the need to support single-piece assemblies.”

Market opportunity

Developing laser-welding technology for automotive aluminum, before customers request such parts, is a key part of Shiloh’s growth strategy, Hoffmann says. To meet the 2025 Corporate Average Fuel Economy standards of 54.5 mpg, lightweighting has become crucial for every automaker. And Shiloh’s leaders say they believe they’re going to see a flood of parts requests in the near future.

“More of the pickups and SUVs— E-segment vehicles that have full-frame doors—this is where you’re going to get the biggest savings, the biggest bang for your buck,” Hoffman says, adding that he expects most vehicle doors and closures to be constructed from aluminum in the next three years.

The industry has been moving in that direction for several years. Almost all pickup hoods are made of aluminum, as are many trunk lids. Automakers started with those parts because they’re fairly simple, serving mainly as protection against the elements. Door panels are tougher because they need to absorb damage in car crashes.

“The closures are hang-on panels. It does not change the whole body shop,” Hoffman says. Making doors out of aluminum is less costly than switching all exterior body panels to the lightweight metal. “You don’t have to do a complete tear-up like Ford is doing [at its pickup plant in] Dearborn [Michigan].”

Since Shiloh began showing off its test door panels in 2014, Hoffmann says the reaction has been overwhelmingly positive. Automakers want to cut weight from vehicles, but they also want to stick to proven technologies. Suppliers that can adapt familiar processes to new materials are going to be the ones to get a lot of attention.

The author is the editor of Today’s Motor Vehicles, a publication of GIE Media, which also publishes Recycling Today. He can be reached at rschoenberger@gie.net.

Dislocated aluminum

Features - Commodity Focus

A temporary dislocation in the market is not encouraging news for aluminum recyclers.

When is good news in the industrial and automotive sectors bad news for metal recyclers? When it causes a temporary dislocation in the market, and that is the current case in the aluminum arena.

In fact, the booming auto industry has created a huge amount of closed-loop aluminum scrap. With manufacturers recycling their internally generated material, demand for aluminum, including 5052 and 3003 grades, that comes from outside that loop is stunted. Mills are not buying the volumes many in the recycling industry anticipated.

Not flowing so freely

“There is a lot of scrap out there, and not enough demand to place it all,” says Matt Kripke, president of Kripke Enterprises, Toledo, Ohio. The company brokers scrap nationwide, and he says Kripke Enterprises has seen a great deal of additional automotive sheet coming into the marketplace.

Tied to that pressure is the general slump in metals across the board. “As the prices of other metals go down, aluminum is dropping along with them,” says Jim Schrock, owner of Earthworks Recycling Inc., Spokane, Washington. “It’s not as dramatic as, say, copper … but we’re definitely getting less trade in the door.”

Kripke says he does not have that problem. “Flow is good.” While he says he is aware some dealers say that ferrous scrap has slowed beyond the usual winter seasonal change, he has not seen that happen in aluminum.

“Maybe some people want to sit on their steel, so their need to move aluminum becomes more pressing,” Kripke says, noting cash flow issues may be at work in this decision.

Eventually, Kripke says, some slowing will be seen in the consumer and retail grades. Right now, however, the alloys and industrial grades are pretty busy and his flow is good.

That leads him to believe the aluminum scrap market is moving in the opposite direction of the ferrous scrap market, he says. In fact, Kripke says he has seen some of his company’s long-time net-30-day customers asking for discounts.

Schrock says he believes the market got used to the sky-high prices of a couple of years ago. Just when it adjusted to the lower prices that ruled the market, aluminum dropped again, and with that drop went the enthusiasm.

“We are seeing a drop in volumes through the door and a drop in excitement at the mills,” says Mitch Goldberg, owner of Northeast Metal Traders, Philadelphia.

With the huge snowfalls along the Atlantic Seaboard this winter, it became difficult to tell just what effects were dominating the aluminum scrap market. Michael Dorfman, vice president of State Metal Industries, Camden, New Jersey, says scrap flow was so stunted by the weather that it was difficult to say what the underlying causes of reduced product movement might be.

“Domestic demand is decent,” Dorfman says. But with a flood of potential sellers on the international market and limited outlets for aluminum scrap beyond the United States, the longer-term outlook might be less than rosy.

Goldberg says he sees a widening of spreads and deadlines being pushed out further and further. “The need at the mills is not as strong as it was. Manufacturing is up, but they are using in-house scrap and not reaching out for loads.” That is a continuation of a trend that has built for the past decade.

He says the tough winter weather had little to do with the weak market. “That started a month before the snowstorms,” Goldberg says, “and the situation was the same in Florida and the Carolinas, where it was much warmer.”

The situation abroad

It’s an interesting, if somewhat different, story on the international scene.

“We are starting to see foreign competition on the sales side,” Dorfman says. “We’re getting offers (to sell scrap into the U.S. market) from Europe and South America that we haven’t seen in years.” With China’s presence as an international buyer greatly reduced—the Chinese have been less aggressive buyers of late—the price pressure is building.

None of the sources contacted for this article is optimistic about the Chinese bouncing back into the market in a bullish fashion. And, even if buyers for Chinese consumers had gotten aggressive early in the year, it was doubtful that they easily could have booked scrap shipments—including aluminum scrap shipments—from the West Coast. Last summer, while not totally unanticipated, came the contract negotiations for longshore workers on the West Coast, which led to a slowdown in activity at the ports.

Schrock says the slowdown in work at these ports damaged fiber and cardboard shipments more so than those of aluminum scrap, but the port issues hurt everyone. Those exporting agricultural commodities were especially hard hit, leading the government to step in to resolve the issues. The stalemate between the International Longshore and Warehouse Union (ILWU) and Pacific Maritime Association (PMA) led to massive congestion at West Coast ports.

Resolution of the contract negotiations, which affected 29 West Coast ports, will have a positive rebound effect on recyclers as well as on farmers, sources say. Keep in mind that material will flow in from foreign ports as well as out to international destinations.

“The United States is where all the action is right now. The problem is that we will fill up pretty fast, and there will be an abundance of material,” Dorfman predicts. “There is an excessive amount of scrap out there,” he adds.

Red Brick Brewing adopts Novelis Evercan packaging

Red Brick Brewing Co., a craft brewer based in Atlanta, will offer its beer in aluminum cans made from Novelis’ evercan, a certified high-recycled-content-aluminum can sheet, according to the Atlanta-based aluminum rolling and recycling company.

The brewer says it will expand its beverage packaging options to include evercan for all of its year-round offerings. The company also plans to expand its use of the evercan line with several new styles over the next year.

“Our decision to expand from glass bottles to evercan aluminum cans aligns with our goal to be an environmentally responsible leader in the southern U.S. craft beer market,” says Garett Lockhart, head brewer for Red Brick. “With evercan, we can achieve greater sustainability without sacrificing any aspect of the beer’s quality.”

The brewery also partnered with Novelis on a closed-loop recycling system for its used beverage cans (UBCs).

“We’re finding that environmentally minded brands, and craft brewers in particular, are looking for a more sustainable packaging to help reinforce their brand profiles and further differentiate their products from the competition,” says Bruce Maclane, Novelis director of evercan craft brew sales. “Red Brick is one of several craft brewers that will be coming on board with evercan in 2015.”

The evercan is made with a minimum 90 percent certified recycled aluminum. The product was introduced in 2014 and is available to beverage companies globally.

A sense of desperation is forming to get orders for scrap. “That could bring the markets down,” Dorfman adds.

Imports declined a bit according to the latest report from The Aluminum Association, Arlington, Virginia. “It is unclear where that is going,” says Matt Meenan, director of communications with The Aluminum Association.

Goldberg says China’s slowdown in buying has been notable.

Upon further review

At home, recyclers are doing their job of collecting aluminum scrap and getting it back into the manufacturing stream. The Aluminum Association likes to point out that nearly 75 percent of all aluminum produced is still in use today.

Across North America, including Canada, the industry recycles about 5 million tons of aluminum each year, most of which directly goes back into the North American supply.

UBCs (used beverage cans) currently represent a bright spot for those processors handling aluminum scrap. Schrock says the UBC market tends to be the most steady part of the aluminum trade for Earthworks Recycling, much more so than extrusions, cast or sheet. “Cans don’t see as much change,” he adds.

The challenge for independents in the Northwest has been the success of UBC recycling at the curbside. “The last 10 percent is where you make your profit,” Schrock says. “As the curbside programs take a wider variety of materials from homes and businesses, you are dividing your overhead by fewer pounds.”

Aluminum beverage cans are once again the most recycled beverage packaging type in the United States with an industry recycling rate of 66.7 percent in 2013, according to new data from The Aluminum Association, Can Manufacturers Institute (CMI) and Institute of Scrap Recycling Industries (ISRI). This marks the third consecutive year the rate has held above 65 percent compared with an average rate of 54 percent reported during the previous decade.

The new recycling rate means that, in 2013, the industry recycled 1.72 billion pounds of UBCs—the equivalent of 60.2 billion cans. A recycled aluminum can becomes a new can in less than 60 days. UBCs can be infinitely recycled in a continuous closed loop.

With UBCs fetching 75 cents per pound in commercial lots and as much as 81 cents per pound in some locations (but as little as 45 to 50 cents for small lots in the Northwest and Midwest), it is little wonder that recycling of UBCs is strong.

Much of the growth in recent years has come from the addition of imported UBCs entering the U.S. recycling stream. Because of aluminum’s high inherent value and the closed-loop recycling process of can making, U.S. scrap consumers often import used cans from Canada, Mexico, Saudi Arabia and other countries. While the number of imported cans decreased slightly from 2012, the number of cans recycled by U.S. consumers increased slightly, offsetting that decline.

In fact, a new life cycle impact assessment study by The Aluminum Association on UBCs specifically excluded imported aluminum beverage cans from its figures. That new study, completed in December 2014, updated the classic 2010 life cycle impact assessment, which did include imported UBCs. The earlier study calculated an industry recycling rate for aluminum recycling that included all UBCs melted in the United States, regardless of where they came from. So, UBCs generated in Mexico or Morocco and imported into the U.S. would be included in the U.S. totals.

The new study uses the consumer recycling rate. That figure is based on domestic UBC recycling as a percentage of UBCs shipped in the previous year, The Aluminum Association says. For recycling operations, the difference might be somewhat academic. However, for state recycling coordinators and others who base the success of programs on accurate figures, the new system is more representative of real world recycling of UBCs. The new study puts the recycled UBC figure at 70 percent—and a 70 percent recycling rate looks a lot nicer than 66.7. At least for the near future, The Aluminum Association says it will continue to report and use both figures.

No matter how the numbers are calculated, the downside of the latest report is that $812 million worth of aluminum cans are not being recycled (based on 2013 figures). Those cans ended up in landfills.

Lightweighting has helped to reduce the amount of aluminum lost to landfills. The typical UBC in 2014 had a weight of just 0.013 kilograms, or just less than half an ounce (0.46 ounces to be precise).

While markets for UBCs remain strong, there is question about where the market for aluminum cast and sheet is headed.

An uncertain outlook

The experts contacted for this story are split on their expectations regarding demand; some say they expect demand to pick up in the second half of 2015.

“I do anticipate the automotive scrap issue will work its way through the market, and these guys will be buying again,” Kripke says. “It will go from a buyer’s market to a seller’s market in the second half of the year.”

Dorfman is not so sure, however. “It’s getting tougher out there,” he says.

He says he is adopting a wait-and-see attitude and playing it close to the vest.

Goldberg agrees with Dorfman. “We will be in this for a while,” he says. “It is not prices driving the slow-up. It is not the weather. 2015 is going to be a tough year,” Goldberg says.

“I don’t feel the urge at the dealer level to buy the volumes that they were buying,” Goldberg adds.

He adds that his company is seeing growth in the number of mixed loads the company is receiving. “We’re seeing mixed loads of reds and whites rather than full loads of either,” he says. “As a wholesaler, our yard loads have picked up some.”

Others anticipate improvement in the intermediate to longer term. Schrock says he is optimistic about the summer into fall. “We see it flat for a few months, and then it will nibble up a bit,” he says.

With 35 years in the business, he says Earthworks Recycling will ride out the current cycle just the way the business has over the decades. Like other professionals, he will be around for the next cycle.

The author is a contributing editor to Recycling Today. He is based in Cleveland and can be contacted at curt@curtharler.com.